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Jobs bill: smooth start, feisty middle, undramatic passage — like a budget plan

Freshman Sen. Steve Smith, R-Maricopa, addresses the Senate during the third reading for HB2001 on Feb. 16. Although some senators complained that they had little time to read the 217-page bill adequately, Smith said he had found the time to review the measure sufficiently. (Photo by Ryan Cook/RJ Cook Photography)

Freshman Sen. Steve Smith, R-Maricopa, addresses the Senate during the third reading for HB2001 on Feb. 16. Although some senators complained that they had little time to read the 217-page bill adequately, Smith said he had found the time to review the measure sufficiently. (Photo by Ryan Cook/RJ Cook Photography)

In the evening of Feb. 15, as he was shepherding a fierce debate over a slew of tax cuts for businesses, Sen. Ron Gould, R-Lake Havasu City, looked out from the dais to tell a Democratic colleague: “I’m glad that you had the opportunity to offer an amendment, because some of us did not.”

Gould’s remark, delivered in his trademark sardonic style, doesn’t tell the whole story of how the most substantive tax policy changes in a decade managed to get out of the Legislature in three days of special session. On Wednesday, Feb. 16, both houses passed the so-called jobs bill.

But Gould’s frustration provides a glimpse of the tenacity legislative leaders employed to cobble together support — and then hold it — after momentum for the jobs bill had ebbed just a few hours before.

Technically, any lawmaker could offer a floor amendment to any bill, but what Gould, who was chairing the debate, meant was that his party’s leadership had effectively closed the door for further negotiation.

Here’s how the drama unfolded:

Day 1

To fast-track the bill, Gov. Jan Brewer calls the Legislature into a special session on Monday, Feb. 14.

Many of the bill’s provisions are familiar: lower the corporate income tax rate to 4.9 percent; lower commercial and agricultural property taxes; exempt manufacturers from sales taxes for goods sold in other states; increase tax exemptions for business equipment; establish job-creation tax incentives that will replace the state’s expiring enterprise zone program; and increase homeowner rebates to offset an expected rise in residential property taxes.

The bill also would replace the Department of Commerce with the Commerce Authority, a public-private economic development agency that Brewer has touted as one of the pillars of her agenda. If the bill passes, the agency will have a $25 million deal-closing fund to help pay job training and infrastructure costs for businesses that create high-quality jobs in Arizona.

Day 2

In the House Ways and Means Committee, Republicans argue the bill is an investment.

And though many Democrats bemoan the fact that the final bill was not available until Monday night, some 13 hours before the hearing Tuesday morning, House Speaker Kirk Adams, the bill’s primary sponsor, says the concepts are not novel for most members.

“This is the fourth attempt since 2009 of a major tax policy change,” Adams says. “So the concepts, the programs in here, while there are some detail changes, this is not a new product, this is a product that has been worked on for some time that you now have before you.”

The tax package has a deceptively easy time passing in the Senate Commerce and Energy Committee on Feb. 15. By the afternoon, however, it stalls when several lawmakers ask for more time to read the 217-page bill.

Within the Republican caucus, Gould and Sen. Andy Biggs, R-Gilbert, lead the opposition. They argue that lawmakers, essentially, have no oversight over a new Commerce Authority proposed in the bill; they call the new agency a “total separate government.”

“I get a packet like this, and I essentially am told: ‘Vote up or vote down. You have no input.’ It does not make me happy,” Gould says. “You might think this is a pinstriped suit (which he is wearing), but it’s actually tread marks from the number of times I have been run over in the Arizona Senate.”

Another criticism against the measure is the tax cuts don’t take effect soon enough for Arizona to take advantage now of companies that may be fleeing heavily regulated and heavily taxed states like California.

Some freshmen legislators, like Sen. Steve Smith, R-Maricopa, ask what the harm would be if they held the bill so they could spend more time pondering it.

After the caucus, however, leadership regains the upper hand and pushes ahead with the debate, the last step before the full Senate formally votes on the bill.

And by the time lawmakers reconvene on the Senate floor, opposition to the measure has all but fizzled, except for from a few Republicans and the minority caucus.

During the Senate debate, opponents put up a spirited but ultimately futile fight. They hammer on one point: No one has actually read the bill completely.

“No one can actually stand up and defend this bill,” says Sen. Steve Gallardo, D-Phoenix.

Actually, several lawmakers do defend it.

Senate Majority Leader Scott Bundgaard says lawmakers shouldn’t lose sight of what they’re trying to achieve: an innovative public-private partnership whose primary goal is to attract companies to Arizona, and keep them here. He says the current Commerce Department hasn’t been effective.

Bundgaard also says contrary to claims, there is oversight. The Legislature, for example, could choose to bring in the Commerce Authority’s members any time to ask questions. He adds that the governor and legislative leaders appoint the authority’s board members.

Pearce says it’s a carefully drafted bill.

The Senate conducts a division vote, which is a procedural step to move a bill to a final vote.

The bill moves forward.

After the debate, rank-and-file supporters and Senate leaders swear no one resorted to threats or similar pressure tactics to get the bill out.

Smith, for example, says he found time to sufficiently read the bill, and meet with leadership, the governor’s people, and colleagues. He says he came to the conclusion that while he does “not love” the bill, “I’m afraid the alternative is potentially months of nothing.”

This blitzkrieg approach to passing the legislation is not novel. It’s the way state budgets are adopted.

Day 3

The revolt by some Senate Republicans, which seemed substantial a day ago, has evaporated.

During the final reading, Democrats argue there’s no guarantee it will create jobs or bring businesses to Arizona. They also question where the $538 million in tax cuts will come from if the increases in businesses and employment aren’t enough to fill the hole in tax revenue. Many hypothesize that it would mean deeper cuts to education.

Republicans, however, hold it up as an important economic-recovery step that will improve the state’s business climate by lowering the tax burden.

The final tally was 18-11 in the Senate, and 39-21 in the House.

In the House, Rep. Eddie Farnsworth, R-Gilbert, is the only Republican “no” vote.

In the Senate, all Democrats present vote no; three Republican votes with them: Sen. Linda Gray, R-Glendale, Biggs and Gould.

Gould no longer is wearing the pinstriped suit that made him look as if he’d been run over.

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